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Metrolinx is threatening legal action against Bombardier over production delays that the agency fears could derail the opening of two major Toronto transit projects, the Star has learned.

According to a source with knowledge of discussions between the two parties, Metrolinx issued a notice of default to Bombardier last week that claims the Quebec-based rail manufacturer is in breach of contract in its deal to supply the provincial organization with up to 182 light rail vehicles (LRVs).

The notice is a possible precursor to filing a claim for damages against Bombardier, which has yet to deliver a single LRV as part of the order.

The Star hasn’t seen the notice of default. The source spoke to the Star on the condition of anonymity because they were not authorized to talk publicly about the deal.

Bombardier spokesman Marc-André Lefebvre confirmed the company had received “a contractual notice” from the transit agency but, citing the terms of the contract, said he wouldn’t discuss any details.

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Metrolinx placed the $770-million order in 2010 for vehicles to serve provincially-funded LRT lines that include Toronto’s Eglinton Crosstown, Finch Ave. West, and Sheppard Ave. East projects.

The first two lines are scheduled for completion by 2021. Metrolinx will require 76 LRVs for the $5.3-billion Crosstown and 23 LRVs for the $1.2-billion Finch project. The Sheppard LRT has been deferred indefinitely.

Bombardier was supposed to deliver the first pilot vehicle for testing in the spring of 2014. Metrolinx says that although that date was later revised to the spring of 2015, the agency is still waiting.

Metrolinx spokeswoman Anne Marie Aikins wouldn’t confirm the organization had issued a notice of default, saying merely that “Metrolinx is reviewing all of our options as set out in the contract and haven’t ruled anything out as yet.”

She told the Star in an email that Bombardier is now 21 months behind schedule, and she acknowledged that the organization is growing more apprehensive “with each passing day we do not receive the pilot vehicle.”

“Metrolinx has been concerned about Bombardier’s performance for some time as there have been significant quality and manufacturing issues that to date have not been resolved,” Aikins wrote. “We are very anxious to see a resolution given the opening of Eglinton Crosstown (and Finch LRT) in 2021.”

In an email to the Star, Lefebvre said that Bombardier is on track to deliver the vehicles in time for the LRT lines to begin service on schedule.

He said company plans to supply the first pilot vehicle next month, which would give the company 18 months to conduct vehicle testing that normally takes half that time. Full production of the fleet would begin in the spring of 2018.

In May, Bombardier announced changes to its production line that included shifting work on the LRVs from Mexico to its plant in La Pocatière, Que., dedicating its Kingston plant to assembling the vehicles, and adding another site to build the vehicles’ cab structures.

“Based on this timeline, and the strong production recovery plan it recently announced, Bombardier is confident that it will meet its commitments” to Metrolinx, Lefebvre said.

The Toronto LRT lines aren’t the only projects that have been impacted by Bombardier’s production woes.

The TTC’s 2009, $1.2-billion purchase of 204 new streetcars has also been plagued by delays. Under the terms of the original agreement, Bombardier was to have supplied 73 low-floor streetcars to the commission by the end of 2015, but it has only delivered 22 so far.

The commission is pursuing a claim for damages against the company worth about $50 million.

Earlier this year Waterloo Region was forced to postpone the opening date of its ION LRT to 2018, instead of late 2017 as originally planned, because of vehicle delays. Its order for a fleet of 14 LRVs is part of the larger Metrolinx contract.

Bombardier asserts that the already-announced production changes, which included having its Thunder Bay plant focus on building TTC streetcars, will also alleviate problems affecting the other projects.

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